Banks get in on SA’s power boom

Investec announced on Wednesday that it was leading the financing of two South African gas power plants being developed by French company GDF Suez, marking the first major non-renewable independent power projects to be financed by South African institutions.

Construction of the two two greenfield open-cycle turbine power plants, the 670-megawatt (MW) Avon plant in KwaZulu-Natal, and the 335 MW Dedisa plant in the Eastern Cape, has commenced.

The plants are expected to start providing electricity to state company Eskom – with whom power purchase agreements were signed in June – in 2015 at the Dedisa plant and 2016 at the Avon plant.

The plants are 38% owned by GDF Suez, 27% by South African company Legend Power Solutions, 25% by Japanese company Mitsui & Co, and 10% by The Peaker Trust representing broad-based black organisations and communities. GDF Suez will establish the company that operates and maintains the two plants.

Investec said on Wednesday that it was the lead finance arranger in a syndicate of six financial institutions for the two projects, together amounting to a R9.7-billion investment in the country.